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Alpha Natural Resources Inc (NYSE:ANR)
Beneish M-Score
-2.60 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Alpha Natural Resources Inc has a M-score of -2.60 suggests that the company is not a manipulator.

ANR' s 10-Year Beneish M-Score Range
Min: -4.06   Max: -0.54
Current: -2.6

-4.06
-0.54

During the past 13 years, the highest Beneish M-Score of Alpha Natural Resources Inc was -0.54. The lowest was -4.06. And the median was -2.80.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Alpha Natural Resources Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.3314+0.528 * 1.6984+0.404 * 0.7492+0.892 * 0.7955+0.115 * 1.0098
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1701+4.679 * -0.0937-0.327 * 1.137
=-2.60

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $318 Mil.
Revenue was 1050.592 + 1054.098 + 1111.773 + 1093.7 = $4,310 Mil.
Gross Profit was 55.79 + 103.121 + 65.793 + 75.75 = $300 Mil.
Total Current Assets was $2,071 Mil.
Total Assets was $11,193 Mil.
Property, Plant and Equipment(Net PPE) was $8,513 Mil.
Depreciation, Depletion and Amortization(DDA) was $862 Mil.
Selling, General & Admin. Expense(SGA) was $158 Mil.
Total Current Liabilities was $1,126 Mil.
Long-Term Debt was $3,715 Mil.
Net Income was -184.975 + -512.627 + -55.698 + -358.788 = $-1,112 Mil.
Non Operating Income was 16.814 + 0.74 + 249.683 + -8.063 = $259 Mil.
Cash Flow from Operations was 17.861 + -217.048 + -53.961 + -69.561 = $-323 Mil.
Accounts Receivable was $300 Mil.
Revenue was 1191.094 + 1335.123 + 1333.591 + 1558.353 = $5,418 Mil.
Gross Profit was -54.53 + 70.629 + 157.584 + 467.792 = $641 Mil.
Total Current Assets was $2,127 Mil.
Total Assets was $12,097 Mil.
Property, Plant and Equipment(Net PPE) was $9,092 Mil.
Depreciation, Depletion and Amortization(DDA) was $931 Mil.
Selling, General & Admin. Expense(SGA) was $170 Mil.
Total Current Liabilities was $1,256 Mil.
Long-Term Debt was $3,345 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(317.684 / 4310.163) / (299.95 / 5418.161)
=0.0737058 / 0.05536011
=1.3314

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(103.121 / 5418.161) / (55.79 / 4310.163)
=0.11839349 / 0.06970827
=1.6984

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2071.333 + 8513.038) / 11192.825) / (1 - (2127.483 + 9091.801) / 12097.005)
=0.05436108 / 0.07255688
=0.7492

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=4310.163 / 5418.161
=0.7955

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(930.728 / (930.728 + 9091.801)) / (862.199 / (862.199 + 8513.038))
=0.09286359 / 0.09196557
=1.0098

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(158.075 / 4310.163) / (169.826 / 5418.161)
=0.03667495 / 0.03134385
=1.1701

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((3714.976 + 1125.565) / 11192.825) / ((3344.736 + 1256.324) / 12097.005)
=0.43246821 / 0.38034704
=1.137

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-1112.088 - 259.174 - -322.709) / 11192.825
=-0.0937

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Alpha Natural Resources Inc has a M-score of -2.60 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Alpha Natural Resources Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.02741.25230.97280.83291.1821.1640.76991.26420.66080.9686
GMI 1.18640.57461.18271.01671.10280.81481.02981.35291.15173.3113
AQI 0.139911.63240.93660.93520.93911.1930.23511.33210.47850.8547
SGI 1.00131.32271.11651.01321.13461.47651.56971.81490.98110.7102
DEPI 14.61090.0550.85560.93210.98290.91571.48442.83970.61331.0171
SGAI 1.14780.73690.93891.11611.01341.67020.67661.15940.56151.0671
LVGI 1.18230.82141.00320.98941.03120.53550.9871.23641.21441.1407
TATA -0.0098-0.0475-0.0996-0.1092-0.1131-0.0577-0.1151-0.082-0.2261-0.1022
M-score -1.271.88-2.80-3.17-2.71-2.17-2.90-1.47-4.04-2.14

Alpha Natural Resources Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.4680.57540.66051.13331.00720.91130.96861.23541.04691.3314
GMI 1.48651.50171.10031.03610.97951.15313.34.8513.60591.6984
AQI 0.16980.50750.47850.13640.98110.72390.85470.910.59080.7492
SGI 1.73021.24440.98150.80580.71780.7230.71020.74240.75940.7955
DEPI 1.82230.51930.61332.47410.95461.03431.01711.02531.01741.0098
SGAI 0.39250.45390.56140.61761.07061.10891.06691.11941.1831.1701
LVGI 1.19591.23171.21441.29391.09971.18141.14071.10941.15991.137
TATA -0.2602-0.2676-0.2261-0.229-0.072-0.1048-0.1022-0.1081-0.1231-0.0937
M-score -3.48-3.88-4.06-3.79-3.13-3.40-2.15-1.06-2.10-2.60
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